Jack Has Been on the Board of His Brother's Company

question 50

True/False

Jack has been on the board of his brother's company for three years but has never attended a board meeting.He may be liable for failing to act.

Comprehend internal control elements and their importance in managing and safeguarding a company’s assets.

Analyze bank reconciliation components and calculate adjusted cash balances per books.

Understand the purpose and process of a bank reconciliation.

Identify adjustments to the balance per books and balance per bank in a bank reconciliation.

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Definitions:

Company Deposit

Funds placed into a financial institution by a company for safekeeping or to earn interest.

Deposits in Transit

Funds that have been sent to a bank but have not yet been recorded in the bank's records and thus do not appear in the bank balance.

Book Balance

The balance of an account according to the accounting records, not necessarily reflecting the available cash or cleared funds.

Bank Balance

The total amount of funds available in a bank account at a given moment, including all deposits and subtracting any withdrawals.